70 Trades To Make Now That Rates May Rise

If I had to sum up the state of the market right now in one word, it would be “weird.” There seems to be little rhyme or reason to the way Wall Street has reacted to some of the latest headlines.

Take last week. First, the market rallied on the decisive news of Putin’s annexation of Crimea–clear evidence that the market wants to go higher since the referendum in Crimea to leave the Ukraine and join Russia didn’t spook investors, but just seemed to provide some closure to an international crisis.

Of course, the market subsequently sold off after Fed Chairperson Janet Yellen surprised markets by stating that interest rates may rise six months after the Fed winds down its quantitative easing, and the FOMC statement gave a target rate for Fed Funds of 1% at the end of 2015 and 2.25% in the subsequent year.

The FOMC statement also confirmed that the Fed would taper its quantitative easing another $10 billion to $55 billion. This is the third month in a row that the Fed has trimmed its bond buying by $10 billion per month, so if the Fed continues with it current pace, its quantitative easing could be entirely wound down by as early as October.

I already discussed my thoughts on the Fed in a previous blog[1], but it’s clear that the Fed’s announcement spooked investors. It seems that rates may rise earlier than expected; many are concerned that higher interest rates may kill the bull market that we’ve been in for the past few years. I certainly don’t agree with that hypothesis, but in the face of this kind of uncertainty it never hurts to prepare. S

o let’s look at the 70 big blue chips that have been upgraded and downgraded this weekend. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for each of the stocks listed below.

Upgrades

Last Week’s Holds, Now Buys

[2]

Last Week’s Sells, Now Holds

Downgrades

Last Week’s Buys, Now Holds

Last Weeks Holds, Now Sells

Endnotes:

my thoughts on the Fed in a previous blog: http://navelliergrowth.investorplace.com/blog/archive/2014/03/dow-plunged-100-points-fedspeak.html